1. THE COMMONWEALTH FUND Exhibit ES-1. Community-Based Strategy for Improving Care of High-Cost Patients Community governance High-cost patients with multiple chronic conditions Payment reformPrimary care Health information technology Medical home care management fee Accountable Care Organizations Bundled payment for acute episodes Partial capitation Shared savings and shared risks Gain-sharing Value-based purchasing Public–private payer harmonization Medical homes Primary care practice teams System of off-hours care Transitions in care Reduced readmissions Care coordination Electronic health records Electronic prescribing Meaningful use Support for self-care Mobile health applications Computerized decision support Regulatory relief, technical assistance Seed funding

2. THE COMMONWEALTH FUND Source: Patient Protection and Affordable Care Act (P.L. 111-148) as modified by the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152); American Recovery and Reinvestment Act of 2009 (P.L. 111-5); Health Information Technology for Economic and Clinical Health Act (Title XIII, P.L. 111-5). Exhibit 1. New Federal Health Authorities Under the Affordable Care Act, American Recovery and Reinvestment Act, and HITECH LawAuthority Affordable Care Act Innovation CenterPatient Safety Research Center Shared Savings Program (ACOs)Program to Facilitate Shared Decision-making Independent Payment Advisory BoardQuality Improvement and Patient Safety Training Quality Measure DevelopmentPayment Adjustment for Health Care-Acquired Conditions Interagency Working Group on Health Care QualityMedicaid Global Payment System Demonstration Project Patient Centered Outcomes Research InstituteNational Prevention, Health Promotion and Public Health Council Health Innovation ZonesCommunity Transformation Grants Payment Bundling PilotProject Concerning Individualized Wellness Plan Hospital Value-Based Purchasing ProgramTechnical Assistance for Employer-Based Wellness Programs Value-Based Payment ModifierChildhood Obesity Demonstration Project National Strategy for Quality Improvement in Health CareNational Health Care Workforce Commission Quality Measure DevelopmentPrimary Care Extension Program Hospital Readmissions Reduction ProgramNursing Home Compare Website Community-Based Care Transitions ProgramProjects on Culture Change and Use of IT in Nursing Homes American Recovery and Reinvestment Act FMAP Increases Comparative Effectiveness Research COBRA SubsidiesPublic Health Research HITECHEHR Incentive ProgramHIPAA Privacy Requirements

3. THE COMMONWEALTH FUND Exhibit 2. Total National Health Expenditures (NHE), 2011–2021: Current Projection and Goals Projected annual growth rate, NHE per capita NHE, 2021 Cumulative percentage increase in NHE, 2011–2021 Cumulative NHE, 10 years ending in 2021 (2012–2021) Cumulative savings from current projection, 2012–2021 NHE/GDP, 2021 GDP per capita + 1.2 (5.1%, current projection) $4.9 trillion 81.9% $37.9 trillion—20.1% GDP per capita + 1.0 (4.9%) $4.8 trillion 77.0% $37.5 trillion$0.4 trillion19.6% GDP per capita + 0.5 (4.4%) $4.6 trillion 71.6% $37.0 trillion$0.9 trillion19.0% GDP per capita (3.9%) $4.5 trillion 66.3% $36.5 trillion$1.4 trillion18.4% Source: Authors’ calculations.

4. THE COMMONWEALTH FUND Exhibit 3. Illustrative Performance Improvement Targets IndicatorBaseline Baseline improvement rate Target improvement rate Target Potentially avoidable hospitalizations per 100,000 population for chronic conditions 1,037 per 100,000 (2007) 2.2% (2000–07) 4.4% (2016) 809 per 100,000 (2016) Adults with hypertension whose blood pressure is under control 41.2% (2005-08) 2.6% (2001–08) 5.2% (2016) 53.2% (2016) Admissions for uncontrolled diabetes without complications per 100,000 population 21.1 per 100,000 (2007) 4.0% (2000–07) 8.0% (2016) 13.4 per 100,000 (2016) Hospital patients with heart failure who received recommended hospital care 95.0% (2008) 2.7% (2005–08) 5.4% (2016) 100% (2016) Adults age 50 and older who received colorectal cancer screening 60.1% (2008) 2.4% (2000–08) 4.8% (2016) 75.9% (2016) Adults ages 18–64 at high risk (e.g., those with respiratory disease) who received an influenza vaccination in the past 12 months 31.7% (2008) 1.6% (2000–08) 3.2% (2016) 37.0% (2016) Hospital patients with pneumonia who received recommended hospital care 89.8% (2008) 3.2% (2007–08) 6.4% (2016) 100% (2016) All-cause 30-day readmission rates for patients discharged alive to a nonacute care setting with a principal diagnosis of heart failure 24.9% (2010) -0.7% (2008–10) 1.7% (2016) 22.5% (2016) Source: Agency for Healthcare Research and Quality; Centers for Medicare and Medicaid Services/The Joint Commission; authors’ estimates.

5. THE COMMONWEALTH FUND Exhibit 4. Health Care Costs Concentrated in Sick Few— Sickest 10 Percent Account for 65 Percent of Expenses Source: Agency for Healthcare Research and Quality analysis of 2009 Medical Expenditure Panel Survey. Distribution of health expenditures for the U.S. population, by magnitude of expenditure, 2009 1% 5% 10% 50% 65% 22% 50% 97% $90,061 $40,682 $26,767 $7,978 Annual mean expenditure

6. THE COMMONWEALTH FUND Exhibit 5. Patients with Multiple Chronic Conditions More Likely to Undergo Adverse Drug Event or Medical Error Note: U.S. patients only. Source: 2011 Commonwealth Fund International Health Policy Survey. Percent reporting wrong medicine or wrong dose Percent reporting a medical mistake

7. THE COMMONWEALTH FUND Exhibit 6. Community-Based Strategy for Improving Care of High-Cost Patients Community governance High-cost patients with multiple chronic conditions Payment reformPrimary care Health information technology Medical home care management fee Accountable Care Organizations Bundled payment for acute episodes Partial capitation Shared savings and shared risks Gain-sharing Value-based purchasing Public–private payer harmonization Medical homes Primary care practice teams System of off-hours care Transitions in care Reduced readmissions Care coordination Electronic health records Electronic prescribing Meaningful use Support for self-care Mobile health applications Computerized decision support Regulatory relief, technical assistance Seed funding

8. THE COMMONWEALTH FUND Exhibit 7. Net National Health Care Savings Associated with Improved Chronic Care Management Source: J. Holahan, C. Schoen, and S. McMorrow, The Potential Savings from Enhanced Chronic Care Management Policies (Washington, D.C.: The Urban Institute, Nov. 2011). Billions of dollars Total NHE savings $306 billion